CIS Deduction Statements: What They Must Show | 14-Day Rule

Introduction

Most CIS questions reach us on the same night of the month. It’s the 18th, the CIS300 is half done, and a subcontractor has just asked where their statement is. Both are due by the 19th, and the statement is usually the part nobody has built yet.

A CIS deduction statement looks like admin. In practice, it’s the subcontractor’s proof of tax already paid on their behalf, and it should agree, line for line, with what the contractor reports to HMRC. When the two don’t match, it’s the subcontractor’s refund that stalls and the contractor’s phone that rings.

We’ve spent more than 12 years providing CIS bookkeeping services in the UK, mostly for accountancy practices and their construction clients, and the problems repeat. Statements built from invoices instead of payments. Materials figures nobody can support. VAT sitting inside the gross amount. A 30% deduction with no verification number. None of it is difficult, but all of it goes wrong at volume and at the last minute.

This is a short reference for contractors, their bookkeepers and the accountants who review them. It covers what a payment and deduction statement must show, when it’s due, how materials appear, and how to produce statements at volume without rework. At the end are the questions contractors and subcontractors ask us most often.

What the statement must contain

HMRC sets the fields, not the format. A contractor must give a payment and deduction statement to every subcontractor it made a deduction from, whether at the standard 20% or the higher 30% rate. Subcontractors paid gross don’t need one, although issuing it anyway is allowed (HMRC CISR12160).

Required field	What it means in practice	Where it usually goes wrong
Contractor’s name and employer’s tax reference	The legal name and the reference for the contractor’s CIS scheme	Group companies quoting another entity’s reference
Tax month end date	For example, “tax month ending 5 November”	Invoice dates used instead of payment dates
Subcontractor’s name and UTR	The exact name and UTR the subcontractor was verified under	A trading name that doesn’t match, or a sole trader UTR used after incorporation
Verification number	Only where the 30% rate applied because HMRC couldn’t match the subcontractor	Missing from higher-rate statements
Gross amount	The payment made, excluding VAT	VAT left in, especially on reverse-charge invoices
Cost of materials	Only materials that reduced the amount the deduction was applied to	A figure with no receipts or estimate behind it
Amount deducted	The CIS deducted at 20% or 30%	Totals that don’t agree with the CIS300

Anything beyond those fields is optional. HMRC’s own statement template adds the amount liable to deduction and the net amount payable, and its manual notes contractors may show VAT too. We include all three, because they answer most subcontractor queries before they’re asked.

The statement must be in writing. It can go by email only where both sides agree and the subcontractor can save and print it, so a PDF attachment works and a figure typed into an email body doesn’t.

For example, a registered subcontractor invoices £4,800 plus VAT under the domestic reverse charge, including £1,300 of receipted materials. The statement shows a gross amount of £4,800, materials of £1,300 and a deduction of £700, which is 20% of £3,500. The subcontractor receives £4,100, and the contractor accounts for the VAT on its own return.

The 14-day deadline

Statements are due within 14 days after the end of the tax month, and a tax month runs from the 6th to the 5th. So payments made between 6 May and 5 June need their statements by 19 June, which is also the day the CIS300 for that month is due (GOV.UK).

The payment date decides the tax month, not the invoice date. CIS works on payments actually made (HMRC CISR15120), so an invoice dated 30 September but paid on 7 October belongs to the tax month ending 5 November. Its statement is due by 19 November.

Contractors can issue one statement for the month or one per payment, as long as every tax month with a deduction has at least one. For weekly pay runs we use a single monthly statement, because it agrees line for line with the CIS300.

Date	What’s due
5th	The tax month ends
19th	Payment and deduction statements, and the CIS300 return
19th	Payment to HMRC, if paying by post
22nd	Payment to HMRC, if paying electronically

Two details catch people out. Contractors whose average monthly PAYE and CIS payments are under £1,500 can pay HMRC quarterly (HMRC CISR12180), but statements stay monthly. And from 6 April 2026, a month with no subcontractor payments needs a nil return unless HMRC was told in advance through an inactivity request (BDO); that month needs no statements.

Late statements can bring an initial penalty of up to £300, then up to £60 a day until they’re issued (GuildHUB). A late CIS300 costs £100 from day one, rising at two, six and twelve months. In our experience, though, the cost that matters most is a subcontractor’s refund held up by a missing statement.

Materials and how they appear

The deduction is worked out on the payment after materials, and the statement shows the materials figure so the subcontractor can see how the tax was calculated. Before applying the rate, GOV.UK tells contractors to take out:

VAT;
materials the subcontractor paid for directly;
consumable stores, meaning equipment used up on the job;
fuel, except fuel for travelling;
plant hired for the job;
the cost of manufacturing or prefabricating materials.

Only the direct cost counts. The legislation removes from the deduction only what is shown to be the direct cost of materials (Tax Adviser), so a mark-up on materials is treated as labour and profit. Plant only counts when it’s hired for the job, so a charge for the subcontractor’s own equipment has CIS deducted from it.

The evidence is the contractor’s problem. HMRC’s guidance is to ask for receipts and, where there are none, to estimate the materials cost. If HMRC later decides materials were overstated, it can recover the under-deducted tax from the contractor, going back up to six years where reasonable care wasn’t taken (Tax Adviser).

Two other items change the gross amount rather than the materials line:

Contractor charges. Where the contractor deducts its own charges, such as public liability insurance, CITB levy or administration fees, CIS applies only to the payment actually made (HMRC CISR15120).
VAT. It never forms part of the gross amount, including on invoices under the domestic reverse charge.

On the statement, the materials line should equal the figure that reduced the deduction, and nothing else. Materials the contractor supplied free never appear. We keep a materials file for each subcontractor each month, so every figure on a statement traces back to a receipt or a documented estimate.

Producing statements at volume

Most contractors don’t struggle with the rules. They struggle to produce 40 or 400 statements in the few days between the 5th and the 19th, from data spread across invoices, bank payments and a spreadsheet.

What works is one data set: the payments made in the tax month. The CIS300, the statements and the ledger postings all come from the same lines, so they can’t disagree. That matters because HMRC checks a subcontractor’s statement against the contractor’s return before giving credit, and may refuse the claim where they don’t agree (HMRC CISR72060).

This is the calendar we work to:

When	What happens
Before any first payment	Verify the new subcontractor and record the rate and any verification number
6th to 10th	Close the tax month: match payments to invoices, remove VAT, file materials evidence
11th to 15th	Generate the CIS300 and all statements from the same payment data
16th to 17th	Reconcile, then clear the exceptions
18th	File the return and issue the statements
22nd	Electronic payment reaches HMRC

Before anything goes out, we check that:

statement totals agree to the CIS300 and to the CIS liability in the ledger;
every 30% line carries its verification number;
names and UTRs match what HMRC verified;
each materials figure has a receipt or a documented estimate;
no gross amount contains VAT, and every payment date falls inside the tax month.

Statements then go out as PDFs to subcontractors who’ve agreed to email, with the date sent logged. Software does most of the lifting, and it’s unavoidable at scale: verifying more than 50 subcontractors at once needs commercial CIS software (GOV.UK).

This is where CIS300 return outsourcing earns its keep. Our CIS returns team handles subcontractor verification, deductions, the monthly return and statements from one data set, with an exceptions list for sign-off before the 19th. Accountancy practices can have our CIS accounting services in the UK delivered under their own name, and our Construction page covers the wider bookkeeping we do for building firms.

Replacing lost statements

A lost statement is replaced with a duplicate marked “Duplicate”, so it can’t be mistaken for a second payment if the original turns up (HMRC CISR72060). The figures must be the originals. Reprint the statement you issued rather than regenerating it from data that may have changed since.

A wrong statement is a different job. Correct the monthly return first, then issue a replacement that says which statement it supersedes. Returns can be amended through HMRC’s online service, and errors can be corrected for the current and previous six tax years (HMRC CISR66010). Amendments that change a deduction can prompt HMRC checks, so note why each change was made.

Subcontractors have fewer fallbacks than they used to:

From the contractor first. HMRC expects subcontractors to ask the contractor, and to show they’ve tried, before it steps in (AccountingWEB).
From HMRC, in writing only. Since 1 July 2024, HMRC accepts requests for missing statements only in writing, and aims to reply within 15 working days (ICAEW).
Online, under Making Tax Digital. Subcontractors in MTD for Income Tax can view the deductions contractors have reported through their HMRC online account or software (HMRC).

Keeping subcontractor records properly prevents most of this. Contractors must keep CIS records for at least three years after the end of the tax year, and can be fined up to £3,000 if they can’t produce them (GOV.UK). We keep every issued statement as a PDF alongside the return it belongs to, which makes a duplicate a two-minute job.

What subcontractors do with them

For a subcontractor, the statement is evidence of tax already paid. How it’s used depends on how they trade.

Sole traders and partners claim through Self Assessment. A CIS Self Assessment tax return records the full invoiced amounts as income and the total deductions in the CIS deductions box, and HMRC sets them against the tax and National Insurance due (GOV.UK). Because the full invoice is income, the actual cost of materials is still a business expense.

Limited companies reclaim through payroll, not the Corporation Tax return. The year-to-date total goes on the Employer Payment Summary and is set against PAYE and National Insurance, with any surplus carried forward within the tax year. Since April 2021, HMRC has been able to reduce a claim the company can’t support with evidence (AccountingWEB).

What HMRC checks. Before giving credit, HMRC compares the deductions claimed with what contractors reported on their CIS300s. A mismatch is one of the most common reasons CIS tax return refunds are held up (LITRG), which is why a statement that disagrees with the contractor’s return helps nobody.

Making Tax Digital. Subcontractors in MTD for Income Tax can see contractor-reported deductions during the year, so a missing or wrong statement shows up long before the final return.

The stakes have also risen. Since April 2026, HMRC can charge a business that claimed a CIS credit on fraud-connected payments the full amount claimed (National Housing Federation). Genuine statements that agree with the contractor’s return are the simplest protection.

Our Self Assessment team prepares CIS tax returns for subcontractors with the statements and the contractor data side by side, so differences are resolved before filing, not after.

Frequently Asked Questions

CIS statement basics

What is a CIS payment and deduction statement?

It’s the written record a contractor gives a subcontractor showing what was paid in a tax month and how much CIS was deducted. It replaced the old CIS voucher in 2007. For the subcontractor, it’s proof of tax already paid towards their bill.

What must a CIS deduction statement show?

The contractor’s name and employer’s tax reference, the tax month end date, the subcontractor’s name and UTR, the gross amount excluding VAT, any materials cost that reduced the deduction, and the amount deducted. A verification number is only needed where the 30% rate applied because HMRC couldn’t match the subcontractor.

Do subcontractors with gross payment status need a statement?

No. The duty only applies where a deduction was made at 20% or 30%. Contractors can still issue statements to gross-paid subcontractors for their own records.

Is there an HMRC template for CIS statements?

Yes. HMRC publishes a payment and deduction statement template, and most CIS and payroll software produces its own version. The layout is the contractor’s choice, provided every required field appears.

Can CIS statements be sent by email?

Yes, where the contractor and subcontractor both agree and the statement is in a form the subcontractor can save and print. A PDF attachment meets that test.

Can one statement cover several payments?

Yes. A statement can cover every payment in the tax month or be issued per payment, as long as each tax month with a deduction has at least one. Monthly statements are easier to reconcile to the CIS300.

Deadlines, corrections and penalties

When must CIS statements be issued?

Within 14 days after the end of the tax month, which means by the 19th. Payments made from 6 May to 5 June need statements by 19 June.

What happens if a contractor issues CIS statements late or not at all?

The contractor can face an initial penalty of up to £300, then up to £60 a day until the statement is issued. A statement that’s wrong through fraud or negligence can bring a separate penalty. The practical cost is usually a subcontractor’s refund being delayed.

Does the statement follow the invoice date or the payment date?

The payment date. CIS applies to payments actually made, so an invoice paid on or after the 6th falls into the next tax month.

Do I still issue monthly statements if I pay HMRC quarterly?

Yes. Contractors whose average monthly PAYE and CIS payments are under £1,500 can pay HMRC quarterly, but statements are still due for every tax month in which a deduction was made.

What should I do if a statement was wrong?

Correct the CIS300 first, then issue a replacement that says which statement it supersedes. Returns can be amended online, and errors can be corrected for the current and previous six tax years.

Do contractors need to file a return in a month with no payments?

From 6 April 2026, yes. Mainstream contractors must file a nil return unless they told HMRC in advance through an inactivity request. No statements are needed that month, because no deductions were made.

Materials, VAT and amounts

Do CIS statements include VAT?

No. The gross amount excludes VAT, and CIS is never deducted from VAT. That includes invoices under the domestic reverse charge, where the contractor accounts for the VAT itself.

Can a subcontractor add a mark-up to materials?

Not for CIS purposes. Only the direct cost of materials reduces the amount the deduction applies to, so any mark-up has CIS deducted from it.

What if a subcontractor won’t provide receipts for materials?

Ask in writing and keep the request on file. HMRC’s guidance lets the contractor estimate the materials cost where there’s no evidence, but the estimate should be reasonable and documented, because an under-deduction falls back on the contractor.

Can subcontractors also claim materials as an expense?

Yes. The full invoice, materials included, is income on the subcontractor’s return, and the actual cost of materials is an allowable expense. The materials line on the statement only reduced the amount CIS was calculated on.

Why doesn’t my statement match my invoice?

Usually timing or contractor charges. A payment made after the 5th belongs to the next tax month, and where the contractor deducts charges such as CITB levy, insurance or admin fees, CIS applies to the payment actually made. Retentions follow the same rule and are covered when they’re paid.

Lost statements and subcontractor claims

How do I replace a lost CIS statement?

The contractor issues a copy marked “Duplicate” with the original figures. If the original turns up, the marking stops anyone treating it as a second payment.

How can a subcontractor get missing CIS statements from HMRC?

Ask the contractor first. HMRC only accepts requests for missing statements in writing, aims to reply within 15 working days, and will want to know you’ve already tried the contractor. Subcontractors in Making Tax Digital can also see contractor-reported deductions in their HMRC online account.

How do I claim CIS deductions on my Self Assessment tax return?

Record the full invoiced amounts as income on the self-employment pages, and enter the total deducted across all your statements in the CIS deductions box. HMRC takes it off your tax and National Insurance bill and refunds any excess.

How do limited companies reclaim CIS deductions?

Through payroll, not the Corporation Tax return. The company reports year-to-date deductions on its Employer Payment Summary and sets them against PAYE and National Insurance, carrying any surplus forward within the tax year. Claiming through the Corporation Tax return can lead to a penalty.

Why is my CIS tax refund delayed?

Most often because the deductions claimed don’t match what contractors reported, through a missing statement, a wrong UTR or a payment in a different tax month. HMRC may hold the claim until the difference is resolved, so reconcile your statements before filing.

CIS bookkeeping and outsourcing

What do CIS accounting services usually cover?

For contractors: subcontractor verification, deduction calculations, the monthly CIS300, payment and deduction statements, and reconciling CIS to the ledger and to PAYE payments. For subcontractors: the CIS tax return and checking statements against HMRC’s records.

What does CIS300 return outsourcing include?

With us, the monthly cycle end to end: verifying new subcontractors, preparing the CIS300 and statements from the same payment data, reconciling to the ledger, and an exceptions list for sign-off before filing. Accountancy firms can have it delivered under their own name through our CIS returns service.

Do I need a CIS accountant near me?

Not necessarily. CIS work runs through HMRC’s online services and cloud accounting software, so the team doesn’t need to be local. What matters more is a fixed monthly timetable, access to the payment data and a reconciliation of statements to the return every month.

How much do CIS bookkeeping services cost?

It depends on the number of subcontractors, how often they’re paid, how many need verifying and how clean the records are. A contractor paying five subcontractors monthly is a very different job from one paying 60 weekly. Our guide to outsourced bookkeeping rates in the UK explains what moves the number.

What are subcontractor verification services?

Verification is the check with HMRC before paying a new subcontractor, which confirms their CIS registration and the rate to deduct. It’s needed again if they haven’t appeared on your CIS return in the current or previous two tax years. Subcontractor verification services run those checks and keep the evidence with the monthly file.

Still building CIS statements on the 18th?

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Sources and further reading

This article is general guidance on the Construction Industry Scheme as at September 2026. It is not advice on any individual’s circumstances.

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CIS Deduction Statements: What They Must Show and the 14-Day Rule